TORONTO--(BUSINESS WIRE)--Mednow Inc. (TSXV: MNOW) (OTCQX: MDNWF), Canada's leading on-demand virtual pharmacy, is excited to provide a comprehensive update on its business strategy and early growth in the virtual pharmacy sector. With a renewed focus on its core offerings of technology-enabled virtual pharmacy and virtual care experiences, Mednow is executing on its plan to modernize the $47 Billion pharmacy industry.(1) This update outlines the key areas of our strategic plan and showcases the early success of our disruptive virtual pharmacy experience.
Operational highlights focus on increased growth in core virtual pharmacy and virtual pharmacy services, along with reduced costs
Virtual Pharmacy Growth: Strong base developed in the “build phase” and now ready to pursue large partnership launches;
- Annualized monthly revenue for virtual care pharmacy and Medvisit grew 720% from January 2021 to January 2023, from $500K to $4.1M on an annualized basis.
- User growth has been strong with Mednow app registrations at 17K and pharmacy patients of 8K as of May 2023 (up approximately 700% from 1K pharmacy patients in January 2022);
- Total quarterly overhead costs reduced 45% from fiscal Q4 2022 to fiscal Q2 2023 (excluding London Pharmacare Inc. and Liver Care Canada Inc.); and
- Gross margin expansion roadmap includes a focus on higher margin: chronic conditions, virtual clinical services, non-prescription sales and regularly scheduled subscription drug sales, all coupled with high customer retention.
The pharmacy industry is ready for a change to digital pharmacy
Pharmacy is a large “offline” industry
- $47 billion dollar Canadian pharmacy market(1), has a relatively small penetration rate online today based on management estimates;
- Canada has a favorable competitive environment for virtual pharmacy; and
- The U.S. already has large virtual pharmacy players (2)
- $4 billion in annual costs to the Canadian health care system from 5% of emergency room and physician visits due to drug non-adherence(3)
- 20% of family doctors are anticipated to retire in the next 5 years in Toronto(4)
- 6.5 million Canadians without a family doctor(5)
- 28% of Canadians believe health care is in crisis compared to 10% one decade earlier(6)
- 48% of Canadians are dissatisfied with health care system(7)
Driven by a convergence of factors, there has been an increase in demand for virtual pharmacy partnerships from payors and providers, including insurance companies, union groups, employers, and medical service providers. We believe escalating drug costs, which constitute the largest portion of health benefit expenditure (8), have prompted payors to seek cost-containment strategies and greater transparency. Mednow Pharmacy, with its partnerships and positive patient reviews, believes it is positioned to address these needs, considering its differentiated patient and technology experience.
In March 2022, Mednow released its new patient app into the market with a focus on business and doctor clients. In just over a year since its release, Mednow for Business has secured partnerships with groups that service over 500,000 lives, making Mednow the preferred virtual pharmacy for these individuals. With an average patient spend of over $1,000(9) per year, even a modest capture rate would represent significant strides for Mednow.
Although business-to-consumer marketing was part of Mednow’s expenses in 2022 while it was building its technology and establishing its brand, since late 2022 and for 2023 Mednow has solely been focused on patient growth from business-to-business partnership development.
Virtual pharmacy services for providers and patients
Medical clinics and providers are increasingly seeking ways to reduce administrative burdens associated with prescription management, including medication reconciliations and refill requests, while moving away from outdated communication methods such as faxes with pharmacies. Mednow's technology-enabled pharmacy focuses on addressing these challenges and aims to empower medical clinics to focus more on patient care.
Mednow aims to supplement the clinical support provided by prescribers to their patients. For example Mednow’s Virtual Diabetes Program in partnership with Dexcom, ensures that allied health care professionals’ diabetic patients have access to the best practices when it comes to medication adherence and disease state education.
Our recent partnership announcement with Medcan, one of Canada's largest private healthcare organizations, exemplifies the type of growth Mednow is prioritizing—innovative, digital-first, and interdisciplinary healthcare solutions.
Further, we believe that our services play a vital role in bridging the healthcare gap in Canada. As an example, pharmacist minor ailment prescribing is now permitted in provinces such as Ontario just this year. These services, delivered by Mednow's existing pharmacists and covered by the government, incur no costs for patients. Paid virtual pharmacist clinical services is a new concept and Mednow’s technology based pharmacy platform is well positioned to address the need for free virtual care for patients for our existing and growing patient base.
Technology investments and roadmap
Since the launch of our app in the spring of 2022, Mednow has introduced features such as Dependents and Single Sign-On, enhancing the pharmacy experience for our customers. Moving forward, we remain committed to investing in software development. Over the next 12 months, we plan on focusing on the expansion of our over-the-counter product offerings and providing white-labeled storefronts for other businesses to sell their products, with Mednow acting as a trusted fulfillment partner.
As part of our commitment to advanced technology, Mednow currently utilizes artificial intelligence (“AI”) in our fulfillment processes through PAC vision—a machine that employs photo analysis to identify pills in medication packages, helping prevent medication errors and increasing central fill efficiency. Looking ahead, we are exploring the use of AI, both internally developed and through strategic partnerships, in areas such as off-hours non-medical triaging, drug claims analysis, and medication adherence. The inclusion of AI in healthcare represents an exciting frontier, and Mednow's tech-enabled pharmacy platform positions us to efficiently adopt AI solutions.
Lastly, Mednow aims to expand its capabilities by enabling third-party pharmacies to serve as local last-mile fulfillment partners. With already 70+ partnerships in place, Mednow boasts a large pharmacy network to complement its online offering. Mednow believes that this digital-first and robust national fulfillment infrastructure will be competitive as more and more businesses look for virtual pharmacy partners.
Mergers & Acquisitions
While our previous plans for mergers and acquisitions were in place 18 months ago to fuel our growth, the macro-economic environment has shifted. Building upon the progress in our core business, Mednow has made the strategic decision to focus on cost reductions and divestments of non-core assets. The Company believes that this approach will optimize our margin profile, allow us to concentrate our resources more effectively, and set a clear path towards achieving positive cash flow over time. Medvisit, Canada’s doctor home visit company, will continue to complement our core business as it is highly synergistic providing in-home doctor visits for primarily homebound seniors which is the type of client Mednow’s platform was designed to help live healthier lives.
- IBISWorld, Pharmacies & Drug Stores in Canada, 2020; this figure represents the total amount spent on this industry in Canada in 2019
- https://www.forhims.com/; https://www.capsule.com/; https://alto.com/
- CIHI National Health Expenditure, 2019
Mednow (TSXV: MNOW) (OTCQX: MDNWF) is a healthcare technology company offering virtual access with a high-standard of care. Designed with accessibility and quality of care in mind, Mednow provides virtual pharmacy and telemedicine services as well as doctor home visits through an interdisciplinary approach to healthcare that is focused on the patient experience. Mednow’s services include free at-home delivery of medications, doctor consultations, a user-friendly interface for easy upload, transfer, and refill of prescriptions, access to healthcare professionals through an intuitive chat experience and the specialized PillSmart™ system that packages prescriptions in easy to use daily dose packs, each labeled with the date and time of the next dose.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements:
This news release contains certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including without limitation, statements regarding the Company’s belief that it is ready to pursue large partnerships; that the Company will continue to have high customer retention; that the pharmacy industry is ready to change to a digital model; that Canada represents a favorable competitive environment for virtual pharmacies; that the Company will be able to capitalize on a first mover advantage in Canada; the Company’s belief that Mednow is uniquely positioned to address the cost-containment strategies of payors and providers; the Company’s belief that a modest capture rate over the next 12 months would have a significant, positive impact on the Company’s profit and loss; the belief that Mednow’s platform will enable medical clinics to increase focus on patient care; the belief that the Company’s partnerships and programs provide optimal patient support; the Company’s belief that its platform will play a vital role in bridging the healthcare gap in Canada; the Company’s future commitment to continued software development; the Company’s intention to expand over-the-counter product offerings and white label storefronts and the anticipated timeline; the Company’s belief that the use of AI will help prevent medical error and increase efficiency; and the Company’s belief that shifting focus away from mergers and acquisitions while increasing focus on its core business will increase margins and accelerate the Company’s path to positive cash flows, are forward-looking statements and contains forward-looking information. Although Mednow believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.
Forward looking information is typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “postulate” and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance and that such forward-looking information is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this news release including, without limitation, that the Company’s competitive advantages will continue to support high customer retention; that a change in the pharmacy industry to a digital model will benefit the Company as a result of the first mover advantage; that less than 2% of the Canadian pharmacy market is attributed to online pharmacies; that established brick and mortar pharmacy retailers will not be able to effectively transition to a virtual pharmacy model to maintain industry market share; that the demand for virtual pharmacy partnerships will continue; the assumption that an increase in market share would not be accompanied by a reduction in the average patient spend; the assumption that implementation of advanced technological practices in the pharmacy industry will result in better patient care; the assumption that access to virtual pharmacy services can have the effect of increasing access to healthcare in Canada; that a focus on the Company’s core business will reduce overhead and other costs; that general business and economic conditions will not change in a material adverse manner; and assumptions regarding political and regulatory stability and stability in financial and capital markets.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others: the risk that the Company will be unable to secure partnerships as anticipated; the risk that the Company’s customer retention declines; the risk that the Canadian competitive environment is not conducive to a virtual pharmacy model; the risk that the Company will not be able to effectively capitalize on a first mover advantage in the Canadian market; the risk that the Company is unable to adequately address the cost-containment strategies of payors and providers; the risk that an increase in market share would be accompanied by a reduction in average patient spend or that the effect on the Company’s profitability would be insignificant; the risk that the partnerships sought and developed by the Company will be surpassed by industry competitors; the risk that the Company’s platform will not have the effect of increasing access to healthcare in Canada; the risk that the Company’s investment in software development will be insufficient to maintain its current competitive position; the risk that the Company will not be able to expand product offerings or will not be able to do so on the anticipated timelines; the risk that investment in and the use of AI will not reduce medical error or increase efficiency; the risk that increased focus on the Company’s core business will not increase margins or reduce the timeline to achieving positive cash flows; the state of the financial markets for the Company’s securities; recent market volatility and potentially negative capital raising conditions resulting from the continued COVID-19 pandemic and risks relating to the extent and duration of such pandemic and its impact on global markets; the conflict in Eastern Europe; the Company’s ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that the Company is unaware of at this time.
The forward-looking statements contained in this news release are made as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.